MetLife Launches Rideshare Insurance for Lyft Drivers

The new product responds to a need created by the growing use of ridesharing apps, which necessitate what MetLife calls a new kind of coverage for drivers who are not professionals.

(Lyft’s signature pink mustaches will be replaced by a smaller plastic dashboard insignia in 2015. Source: Lyft.)

MetLife Auto & Home has launched a new rideshare insurance product for drivers working within the Lyft rideshare network. The new product, which is the result of a relationship between the two companies beginning June 2014, has launched first for Colorado drivers. Filings are pending in other states, according to a MetLife source.

Jean Vernor, SVP, MetLife.

Jean Vernor, SVP, MetLife.

The new product responds to a need created by the growing use of ridesharing apps, which necessitate what MetLife calls a new kind of coverage for drivers who are not professionals. Transportation network companies, such as Lyft and Uber, do carry liability insurance covering their drivers, but the type of coverage and coverage limits can differ in stages of the service.

MetLife Auto & Home’s Lyft endorsement provides coverage for Lyft drivers engaged in activities related to providing Lyft services, and coverages including Bodily Injury Liability, Property Damage Liability, Medical Payments, and Physical Damage will apply up to the limits selected on the policy, according to a MetLife statement. The endorsement offers coverage for drivers and passengers at every stage of the trip: while the driver is waiting for a passenger request, is en route to pick up a passenger, and during the trip with the passenger. Premiums applicable to the endorsement will vary based on the mileage driven in the Lyft program.

Market Opportunity

MetLife’s announcement follows similar news from Erie Insurance and USAA, notes Denise Garth partner at research and advisory firm SMA. “Meeting these new market needs will not only be critically important to retaining and growing the customer base, but it will also be crucial to staying in the game to compete with new players such as the non-profit Peers, funded and backed by many in the sharing economy, and Metromile, a relatively new usage-based insurance start-up,” she comments.

Screenshot of Lyft mobile phone app.

Screenshot of Lyft mobile phone app.

MetLife and Lyft recognized an opportunity in the insurance market for drivers and passengers who are part of the growing rideshare community, according to Jean Vernor, senior VP in MetLife’s U.S. Direct business. “With this innovative product offering, MetLife is committed to helping consumers secure access to the products and services they need to protect themselves and their families, and is proud to partner with Lyft to make this unique product available to their drivers,” Vernor comments.

As of January 27, 2015, Lyft drivers in Colorado could call MetLife Auto & Home directly to to inquire about a policy. Current MetLife auto policyholders in Colorado are able to have their policy rewritten with the Lyft endorsement as of that date, according to the insurer.

“Innovation has been a hallmark of MetLife Auto & Home for many years,” commentss Kishore Ponnavolu, president, MetLife Auto & Home. “We were the first to include identity-theft resolution services in our policies, and for many years, we have included coverage to replace a new car without deduction for depreciation in its first year or 15,000 miles. This first-of-its-kind product will provide Coloradans who drive for Lyft a policy crafted specifically for their ridesharing needs.”

Denise Garth, Partner, SMA.

Denise Garth, Partner, SMA.

SMA’s Garth notes that the recent rideshare insurance announcements have been characterized by partnerships—MetLife with Lyft, Metromile with Uber, and Peers with an insurer that underwrites its product—and different approaches to coverage. “From developing an endorsement for coverage during the use of a vehicle for shared transportation, to addressing the insurance gap between the shared transportation company’s commercial auto policy and the driver’s needs, to providing a replacement vehicle if the driver’s car breaks down or is in an accident, the insurers have implemented innovative approaches to meet the needs of the market,” Garth says. “Technology is playing a significant role in these offerings through mobile apps, telematics, and connected car apps.”

MetLife’s Lyft announcement, along with the other rideshare deals, represents a step forward for the industry, but leaves other issues unresolved. For example, insurers are yet to propose solutions for coverage of shared property and the implications for auto and home bundled insurance, Garth observes. “Insurers must quickly begin to engage in experimentation, piloting, partnering, and taking an outside-in view,” she cautions. “These efforts will be critical to capturing this new market opportunity—before others outside the industry do.”

 

 

Anthony R. O’Donnell // Anthony O'Donnell is Executive Editor of Insurance Innovation Reporter. For nearly two decades, he has been an observer and commentator on the use of information technology in the insurance industry, following industry trends and writing about the use of IT across all sectors of the insurance industry. He can be reached at [email protected] or (503) 936-2803.

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